Keystone XL oil pipeline clears significant hurdle

By MATTHEW DALY , Associated Press

Jan. 31, 20149:20 PM ET

WASHINGTON (AP) — The long-delayed Keystone XL oil pipeline cleared a major hurdle toward approval Friday, a serious blow to environmentalists' hopes that President Barack Obama will block the controversial project running more than 1,000 miles from Canada through the heart of the U.S.

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FILE - In this March 11, 2013, file photo, a sign reading "Stop the Transcanada Pipeline" stands in a field near Bradshaw, Neb. The proposed Keystone XL pipeline will run through this field. In a move that disappointed environmental groups and cheered the oil industry, the Obama administration on Jan. 31, 2014, said it had no major environmental objections to the proposed Keystone XL oil pipeline from Canada. (AP Photo/Nati Harnik)

FILE - In this March 11, 2013, file photo, a sign reading "Stop the Transcanada Pipeline" stands in a field near Bradshaw, Neb. The proposed Keystone XL pipeline will run through this field. In a move that disappointed environmental groups and cheered the oil industry, the Obama administration on Jan. 31, 2014, said it had no major environmental objections to the proposed Keystone XL oil pipeline from Canada. (AP Photo/Nati Harnik)

Natural Resources Minister Joe Oliver says the government is encouraged by the outcome of the U.S. State Department's final environmental impact study on the Keystone X-L pipeline. Oliver urged the Obama administration to make a “timely decision,” noting the United States has been studying the pipeline for five years. He said the latest federal study was the fifth on its environmental impact and said each report has stated that the pipeline would not adversely affect the environment. (AP Photo/The Canadian Press, Frank Gunn)

FILE - In this May 24, 2012 file photo, some of about 500 miles worth of coated steel pipe manufactured by Welspun Pipes, Inc., originally for the Keystone oil pipeline, is stored in Little Rock, Ark. In a move that disappointed environmental groups and cheered the oil industry, the Obama administration on Jan. 31, 2014, said it had no major environmental objections to the proposed Keystone XL pipeline from Canada. (AP Photo/Danny Johnston)

FILE - In this Dec. 3, 2012 file photo, crews work on construction of the TransCanada Keystone XL Pipeline near County Road 363 and County Road 357, east of Winona, Texas. In a move that disappointed environmental groups and cheered the oil industry, the Obama administration on Jan. 31, 2014, said it had no major environmental objections to the proposed Keystone XL oil pipeline from Canada. (AP Photo/The Tyler Morning Telegraph, Sarah A. Miller)

FILE - In this April 19, 2012, file photo, an irrigation pivot remains still along highway 14, several miles near the proposed new route for the Keystone XL pipeline in Neligh, Neb. In a move that disappointed environmental groups and cheered the oil industry, the Obama administration on Jan. 31, 2014, said it had no major environmental objections to the proposed Keystone XL oil pipeline from Canada. (AP Photo/Nati Harnik)

The State Department reported no major environmental objections to the proposed $7 billion pipeline, which has become a symbol of the political debate over climate change. Republicans and some oil- and gas-producing states in the U.S. — as well as Canada's minister of natural resources — cheered the report, but it further rankled environmentalists already at odds with Obama and his energy policy.

The report stops short of recommending approval of the pipeline, but the review gives Obama new support if he chooses to endorse it in spite of opposition from many Democrats and environmental groups. Foes say the pipeline would carry "dirty oil" that contributes to global warming, and they also express concern about possible spills.

Pushing back on the notion that the pipeline is now headed for speedy approval, the White House said the report isn't the final step and noted that the report includes "a range of estimates of the project's climate impacts." Only after various U.S. agencies and the public have a chance to weigh the report and other data will a decision be made, said White House spokesman Matt Lehrich.

"The president has clearly stated that the project will be in the national interest only if it does not significantly exacerbate the problem of carbon pollution," Lehrich said.

Republicans and business and labor groups have urged Obama to approve the pipeline to create thousands of jobs and move further toward North American energy independence. The pipeline is also strongly supported by Democrats in oil and gas-producing states, including Sens. Mary Landrieu of Louisiana, Mark Begich of Alaska and Mark Pryor of Arkansas. All face re-election this year and could be politically damaged by rejection of the pipeline. Republican Mitt Romney carried all three states in the 2012 presidential election.

The 1,179-mile pipeline would travel through the heart of the United States, carrying oil derived from tar sands in western Canada to a hub in Nebraska, where it would connect with existing pipelines to carry more than 800,000 barrels of crude oil a day to refineries on the Texas Gulf Coast. It would cross Montana and South Dakota before reaching Nebraska. An existing spur runs through Kansas and Oklahoma to Texas.

Canadian tar sands are likely to be developed regardless of U.S. action on the pipeline, the report said,

The report says oil derived from tar sands in Alberta generates about 17 percent more greenhouse gas emissions that contribute to global warming than traditional crude. But the report makes clear that other methods of transporting the oil — including rail, trucks and barges — would release more greenhouse gases than the pipeline.

U.S. and Canadian accident investigators warned last week about the dangers of oil trains that transport crude oil from North Dakota and other states to refineries in the U.S. and Canada. The officials urged new safety rules, cautioning that a major loss of life could result from an accident involving the increasing use of trains to transport large amounts of crude oil.

An alternative that relies on shipping the oil by rail through the central U.S. to Gulf Coast refineries would generate 28 percent more greenhouse gases than a pipeline, the report said.

State Department approval is needed because the pipeline crosses a U.S. border. Other agencies will have 90 days to comment before Secretary of State John Kerry makes a recommendation to Obama on whether the project is in the national interest. A final decision is not expected before summer.

Senate Minority Leader Mitch McConnell, R-Ky., said the report "once again confirms that there is no reason for the White House to continue stalling construction of the Keystone XL pipeline."

McConnell said: "Mr. President, no more stalling, no more excuses. Please pick up that pen you've been talking so much about and make this happen. Americans need these jobs. "

However, a top official at the Natural Resources Defense Council, an environmental group, said the report gives Obama all the information he needs to reject the pipeline.

"Piping the dirtiest oil on the planet through the heart of America would endanger our farms, our communities, our fresh water and our climate," said Susan Casey-Lefkowitz, the NRDC's international program director. "That is absolutely not in our national interest."

The report said the pipeline was likely to have an adverse effect on the endangered American burying beetle, found in South Dakota and Nebraska. But it said that could be offset by a monitoring program and other requirements on the pipeline operator.

In Canada, Natural Resources Minister Joe Oliver welcomed the report and said officials there "await a timely decision" on the pipeline.

"The choice for the United States is clear: oil supply from a reliable, environmentally responsible friend and neighbor or from unstable sources with similar or higher greenhouse gas emissions and lesser environmental standards," he said.

The new report comes only days after Obama's State of the Union address, in which he reiterated his support for an "all-of-the-above" energy strategy that embraces a wide range of sources, from oil and natural gas to renewables such as wind and solar power. The remarks were a rebuff to some of his environmental allies who argued that Obama's support of expanded oil and gas production doesn't make sense for a president who wants to reduce pollution linked to global warming.

Obama blocked the Keystone XL pipeline in January 2012, saying he did not have enough time for a fair review before a deadline forced on him by congressional Republicans. That delayed the choice for him until after his re-election.

Obama's initial rejection went over badly in Canada, which relies on the U.S. for 97 percent of its energy exports. The pipeline is critical to Canada, which needs infrastructure in place to export its growing oil sands production

In response, Obama quickly suggested development of an Oklahoma-to-Texas line to alleviate an oil bottleneck at a Cushing, Okla., storage hub. Oil began moving on that segment of the pipeline last week.

The 485-mile southern section of the pipeline operated by Calgary-based TransCanada did not require presidential approval because it does not cross a U.S. border.

TransCanada chief executive Russ Girling said he was pleased at the latest environmental review, the fifth released on the project since 2010. "The conclusions haven't varied. They are the same as before," he said.

Environmental groups criticized the State Department for publishing the report before the department's inspector general released findings of an inquiry into a contractor that worked on the review. Friends of the Earth and other groups say the contractor, Environmental Resources Management, has financial ties to TransCanada.

"We feel confident there are no issues related to this contractor," said Kerri Ann Jones, an assistant secretary of state who has overseen the Keystone review.

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Associated Press writers Rob Gillies in Toronto and Josh Lederman in Washington contributed to this report.

WASHINGTON (AP) — The long-delayed Keystone XL oil pipeline cleared a major hurdle toward approval Friday, a serious blow to environmentalists' hopes that President Barack Obama will block the controversial project running more than 1,000 miles from Canada through the heart of the U.S.